President-elect Donald Trump said Wednesday he plans to leave his business “in total” to focus on the White House and will discuss the matter at a news conference Dec. 15 in New York with his children, some of whom are business associates.
“While I am not mandated to do this under the law, I feel it is visually important, as President, to in no way have a conflict of interest with my various businesses,” Trump said in a series of tweets. “Hence, legal documents are being crafted which take me completely out of business operations. The Presidency is a far more important task!”
Trump didn’t say he would sell or gift his business to his children, nor did he spell out what structure he would put in place to distance himself from the Trump Organization Inc. Former White House ethics lawyers have urged him to fully divest his assets and put the cash in a blind trust in order to avoid any conflicts of interests.
“If he just turns the management of his business over to his children, the conflicts remain,” said Richard Painter, who was President George W. Bush’s chief ethics lawyer. “He has to make sure no one in government talks about Trump Organization business.”
Concerns about potential conflicts of interest in domestic and foreign affairs have swirled around the billionaire ahead of his January inauguration. He will be the first president not to have held elected office or a position in the military.
In an interview with the New York Times last week, Trump said a sitting president “can’t have a conflict of interest” and said federal law is “totally on my side.” Presidents are exempt from the 1978 Ethics in Government Act, an exception crafted in the belief that presidents shouldn’t have to worry about triggering ethics probes when making decisions.
Many of Trump’s assets are in the form of licensing deals to put his name on developments all over the world. It’s a type of a brand equity that would be difficult for him to transfer, although three of his adult children—Ivanka, Donald Jr. and Eric—are Trump Organization executives who carry the name.
Past presidents have routinely placed their liquid assets, including stocks and bonds, into blind trusts. Trump said on the campaign trail that placing his assets with his children would constitute such a trust, although they are almost always overseen by independent trustees.
The bare outlines of Trump’s plan don’t appear sufficient for the scale of the possible conflicts, said Norman Eisen, who served as ethics czar to President Barack Obama.
“The president-elect said he will exit his ‘business operations,’” Eisen said in an email. “That’s not enough. Although it is important that he have no involvement in operations, in order to avoid conflicts, he must also exit his business ownership through using a blind trust or the equivalent.”
Sen. Lindsey Graham of South Carolina, a longtime Republican critic of Trump, told reporters on Tuesday that failing to exit his business fully would “cloud his presidency.”
“I don’t want to prejudge what he’s going to do, but here’s what I believe: It needs to be dealt with,” Graham said.
Trump’s business deals with overseas partners have raised concerns he could be in violation of the emoluments clause of the U.S. Constitution, which prohibits government officials from accepting gifts or payments from foreign governments.
“If he doesn’t sell, he needs to make sure there is no foreign government money coming in there at all,” Painter said.
In the Philippines, Trump has a licensing deal for a Trump Tower in Manila with a real-estate developer who was recently named a special government envoy to the U.S. by President Rodrigo Duterte. The largest office tenant in Trump Tower in Manhattan is state-controlled Industrial & Commercial Bank of China Ltd., which is due to renegotiate its lease in 2019. And the lease on the hotel Trump recently completed in Washington, D.C., appears to bar participation by any elected official.
The case of his Washington hotel illustrates the difficulty Trump faces. He and his family could likely alter the structure of the Trump Old Post Office LLC that leases the property to wipe out Trump’s stake and augment those of his three oldest children, legal experts say. But any determination that he needed to sell the lease entirely could lead to lengthy negotiations that would almost certainly take longer than the seven weeks left before Trump is scheduled to take the oath of office.
Anyone who purchased Trump Organization property could also face questions over whether the price reflected an attempt to do a favor for the president-elect.
Newly named Trump White House counsel Donald McGahn, a former Federal Election Commission chairman who also served as chief lawyer to Trump’s campaign, will help the transition navigate the potential conflicts. Trump Organization general counsel Alan Garten, who specializes in real estate and corporate law, is said to be working on the matter from the business side.
The three Trump children who are executives in his business were top advisers and surrogates for his campaign, and their presence in the transition has raised questions about nepotism laws and ongoing access of business officials to U.S. policymaking. Ivanka Trump sat in on a call with the president of Argentina as well as a face-to-face meeting with top Japanese diplomats.
Trump would need to seek official advice from the Office of Legal Counsel at the U.S. Department of Justice on what kind of payments he would be allowed to accept from an entity controlled by a foreign government, said Painter.
Regardless of the structure Trump puts in place, some Trump-branded properties in foreign countries could become potential terrorist targets now that his name has become a de facto symbol of the U.S. government, he said.
“He should not be making money renting out his name—it creates a global security risk,” Painter said. “He needs to get his name off buildings that are outside the U.S. for four years.”
It’s not clear that Trump yet has the plan he will be announcing Dec. 15, said Danielle Brian, the executive director of the Project on Government Oversight, a watchdog group.
Brian said it was difficult to see how “the architecture of a resolution to this problem could be resolved so quickly.”
“It clearly would not be easy and it would be a complete transformation of the way he has become familiar with doing business,” she said.